The Impact of Climate Change on Home Insurance

Homeowners are facing the evolving risks of climate change. Whether it’s stronger hurricanes along the coasts or more frequent wildfires in the West, severe weather events are becoming more frequent, destructive, and expensive. Consequently, these changes are also significantly impacting homeowners insurance.

Rising Insurance Premiums and Deductibles

When more insurance claims are filed, the price of coverage goes up. Homeowners in high-risk zones face higher premiums and larger deductibles for wind, fire, and water damage. As risks evolve, insurers are using sophisticated climate data models to assess perils based on zip code, proximity to wildfire zones, and elevation. Moreover, an increase in claims and risks may result in more exclusions to homeowners policies, or even mandatory upgrades to roofing and plumbing systems.

Natural Disaster Frequency

The cost of claims from hurricanes, flooding, and wildfires is increasing across the country. In response to handling these claims, insurers must adjust premiums and limit their coverage in high-risk areas. In some cases, insurers have pulled out of certain markets altogether due to climate-related risks.

What Homeowners Can Do

While you can’t change climate-related risks, there are steps you can take to prepare:

• Review your policy annually, paying close attention to updated exclusions or coverage limits.

• Invest in mitigation like sump pumps and fire-resistant materials to help lower premiums.

• Talk to your insurer about possible endorsements or supplemental policies for flood, hurricane, or wildfire damage.

Contact Us

Climate change is affecting many aspects of daily life, including your homeowners insurance. However, with proactive planning and understanding your policy, you can be financially prepared for severe weather. The team at AeroMex Insurance in Sherman, TX can help you determine the best policy for your needs and budget. Contact us today for a personalized quote or more information.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.